Instructions For Form 8835 - 2011 Draft printable pdf download

2011

Department of the Treasury

Internal Revenue Service

Instructions for Form 8835

Renewable Electricity, Refined Coal, and Indian Coal Production Credit

How To Figure the Credit

Section references are to the Internal Revenue Code unless

otherwise noted.

Generally, the credit for electricity, refined coal, and Indian coal

produced from qualified energy resources at a qualified facility

during the credit period (see Definitions, later) is:

What’s New

•

1.5 cents per kilowatt-hour (kWh) for the sale of electricity

produced by the taxpayer;

The carryforwards, carrybacks, and passive activity limitations

•

1/2 of 1.5 cents for open-loop biomass, small irrigation,

for this credit are no longer reported on this form; instead, they

landfill gas, trash, hydropower, and marine and hydrokinetic

must be reported on Form 3800, General Business Credit.

renewable facilities;

•

$4.375 per ton for the sale of refined coal produced, see

section 45(e)(8)(A);

•

$2 per barrel-of-oil equivalent for the sale of steel industry

General Instructions

fuel, see section 45(e)(8)(D); or

•

$2 per ton for the sale of Indian coal produced.

Purpose of Form

The credit for electricity produced is proportionately phased

out over a 3-cent range when the reference price exceeds the

Use Form 8835 to claim the renewable electricity, refined coal,

8-cent threshold price. The refined coal credit is proportionately

and Indian coal production credit. The credit is allowed only for

phased out over an $8.75 range when the reference price of

the sale of electricity, refined coal, or Indian coal produced in

fuel used as feedstock exceeds 1.7 times the 2002 reference

the United States or U.S. possessions from qualified energy

price. The 1.5-cent credit rate, the 8-cent threshold price, the

resources at a qualified facility (see Definitions, later).

$4.375 refined coal rate, the reference price of fuel used as a

Generally, if you are a taxpayer that is not a partnership or S

feedstock, the $2 steel industry fuel rate, and the $2 Indian coal

corporation, and your only source of this credit is from a

rate are adjusted for inflation. The reference price and the

partnership, S corporation, estate, trust, or cooperative, you are

inflation adjustment factor (IAF) for each calendar year are

not required to complete Part I of this form. Instead, you can

published during the year in the Federal Register. If the

report this credit directly on Form 3800, Part III, line 1f. The

reference price is less than the threshold price (adjusted by the

following exceptions apply.

IAF), there is no reduction. For electricity produced, if the

•

reference price is more than 3 cents over the adjusted threshold

You are an estate or trust and the source credit can be

price, there is no credit; if the reference price is more than the

allocated to beneficiaries. For more details, see the Instructions

threshold price, but not more than 3 cents over the adjusted

for Form 1041, Schedule K-1, box 13.

threshold price, there is a phaseout adjustment on line 2 or line

•

You are a cooperative and the source credit can or must be

16. For refined coal produced, if the reference price is more

allocated to patrons. For more details, see the Instructions for

than $8.75 over the adjusted threshold price, there is no credit;

Form 1120-C, Schedule J, line 5c.

if the reference price is more than the threshold price, but not

more than $8.75 over the adjusted threshold price, there is a

Election To Treat a Qualified Facility as Energy

phaseout adjustment on line 19.

Property

Note. For calendar year 2011, the effective credit rate for

Section 48(a)(5) provides an irrevocable election to treat

electricity, refined coal, steel industry fuel, and Indian coal

qualified property (described in section 48(a)(5)(D)) that is part

produced and sold is, respectively, 2.2 cents per kWh, $6.33

of a qualified investment credit facility (described in section

per ton, $2.89 per ton, and $2.20 per ton; there is no phaseout

48(a)(5)(C)) as energy property eligible for the investment credit

adjustment.

(reported on Form 3468, Investment Credit) in lieu of a

production credit reportable on this form. This election applies

Example. If the reference price of electricity is 10.0¢ and

to a facility placed in service after December 31, 2008, and

the adjusted threshold price is 9.0¢, reduce the credit by 1/3

before January 1, 2014, (before January 1, 2013 for a wind

((10.0¢ – 9.0¢) ÷ 3¢ = .3333). Enter the line 1 credit in the first

facility). See Notice 2009-52 and Form 3468, for information on

entry space on line 2, .3333 in the second entry space, and

making the election. Notice 2009-52 is available at

multiply to figure the reduction.

Definitions

Coordination with Department of Treasury

Resources means wind, closed-loop biomass, poultry waste,

Grants

open-loop biomass, geothermal energy, solar energy, small

If a grant is paid under the American Recovery and

irrigation power, municipal solid waste, hydropower production,

Reinvestment Act of 2009 (the Act), section 1603, for placing

marine and hydrokinetic renewables, refined coal, and Indian

into service specified energy property (described in Act section

coal.

1603(d)), no production credit under section 45, or investment

Closed-loop biomass is any organic material from a plant

credit under section 48, is allowed for the property for the

current tax year or any subsequent tax year. See section 48(d)

that is planted exclusively for use at a qualified facility to

for more information.

produce electricity.

Sep 20, 2011

Cat. No. 55349M

Instructions For Form 8835 - 2011 Draft

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